The year 2021 has been a record year in terms of cryptocurrencies. Notably, Bitcoin hit a value of over $60,000 and the likes of ETH and ADA experienced substantial gains too. With Bitcoin being the original, and the biggest, it has been encouraging to see altcoins have succeeded alongside it.
The increase in the value of Bitcoin can largely be attributed to the fact that it appears to have entered the mainstream. What we have seen is the likes of Tesla accepting the crypto as payment for its cars as well as PayPal entering the scene and allowing users to deal in Bitcoin too. Then there are companies such as Microsoft getting in on the act along with numerous private hedge fund managers.
Crypto as a whole saw an explosion in popularity thanks to the rise of meme coins such as Doge and Shibu Inu. These cryptos were available for less than a penny and saw millionaires being made almost overnight. It all sounds great so far, right? As with all good things though, there is often a downside. The downside here is that crypto is now being blamed for a global shortage of chips. Is that blame rightly apportioned? Let’s take a look.
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The rise of the crypto casino
Before we get into the exact ins and outs of the chip shortage that is being experienced, it is worth taking a look at another area where crypto is increasing in popularity. That being online casinos. These have been popular for many years and as gameplay and graphics have improved, the numbers visiting have continued to grow.
There is an increasing number of online casinos that are now accepting crypto as payment. This has numerous benefits for players:
- High maximum deposits
- Exclusive promotions and bonuses
- Increased privacy
- The currency is accepted globally
- Fast transactions
All of these factors are great news for online players, but the last point is, perhaps, the one of most interest. There have been times when players have been frustrated with the times that it can take to make a deposit and, even more so, with the time to withdraw. Crypto casinos are now rivalling the withdrawal speeds of some of the fastest online casinos like those on this list from Compare.bet.
Why crypto is relevant to the chip shortage
You may wonder why we are looking at how the increased use of crypto is relevant to the global shortage of chips. The issue is that the likes of Bitcoin have always needed a considerable amount of processing power. With more and more people seeing the benefits of crypto, there is an increase in the numbers who are looking to mine it rather than buying it. With single Bitcoin being worth almost $70,000 many would like to take their chances in the hope of mining rather than just purchasing.
With so many more people mining, and with the processing power required, there has been a spike in demand for graphics cards. This has led to a situation where there are barely enough graphics cards left for gamers and those that are available have rocketed in price. Demand is far outstripping supply.
The third-largest chipmaker in the world is a company called TSMC. It has been reported that a tenth of all sales of its chips were made to satisfy the needs of those mining crypto.
Just how bad is the situation?
It is fair to say that the situation with chips is less than great right now. It is not just crypto and mining that relies on these. Chips are needed for smartphones, for TVs, and for a host of other domestic appliances. The lack of chips is leading to a shortage of these items. It has reached the stage where it has even been suggested that it is unable to release its updated version of the Galaxy Note.
It is not just Samsung that has been impacted. Apple has said on numerous occasions that the shortage of chips has had a major impact on sales on its phones. It is also becoming increasingly difficult to get your hands on games consoles such as the Playstation and Xbox.
Do we just have crypto mining to blame?
While the increased interest in crypto, and the need for processing power in order to mine, has undoubtedly had an impact on the supply of chips, there are other factors that are at play. These include:
A lack of manufacturers
To have any chance of keeping up with demands there, of course, needs to be an increase in supply. The world’s largest chipmaker for smartphones and other mobile devices, Qualcomm, has said on numerous occasions that the lack of manufactures is hurting the industry.
Chips are used everywhere
While demand may be on the up because of mining, the truth is that we have become reliant on this technology. No matter where you look in your home, or out and about, you are going to come across cases where the chip is in use. Bank cards, microwaves, water purifiers, WIFI routers, and practically everything else needs these chips to work.
Covid has had far-reaching effects and this even spreads to chips. With lockdowns across the world, companies began to scale back production. This meant a reduced need for chips, especially from the car industry, and so supplies were cut. With a shortage of manufactures, it has been nigh on impossible to play catch up and recover.
There is little doubt that the increased interest in crypto and mining has played a role in the local chip shortage. It is, however, unfair to apportion entire, or even the majority of, blame here. There are many other factors in play and these are more significant than crypto.
In terms of riding the storm and coming out of the other end, those in the know expect us to be facing issues for some time. It is likely to be mid-2022 before we see any marked improvements with supply.